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Industrial SME’s Role in Job Creation and Sustaining Growth in Jordan

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Presentation on theme: "Industrial SME’s Role in Job Creation and Sustaining Growth in Jordan"— Presentation transcript:

1 Industrial SME’s Role in Job Creation and Sustaining Growth in Jordan
Dr. iyad abu haltam Jordan chamber of industry

2 International Experience
Real engine of growth and job creation. Major field to enhance productivity, innovation,… 90% of firms in the world 60% of labor force 95% of EU firms More then 50% of labor force in EU

3 International Experience

4 Why SME’s Labor intensive
This role comes as a result of the following facts: Labor intensive Income Redistribution Efficient use of resources Building productive environment Major component of local development

5 SMEs in Jordan 99.6 % MSMEs 91.5% Micro 0.4 % Large Employment Large
> 100 Medium 20 – 99 Small 5 – 19 Micro 1-4 No. Firms Large 668 Medium 2,244 Small 10,454 Micro 143,362 TOTAL 156,728 0.4 % Large 1.4 % Medium 6.7 % Small 99.6 % MSMEs 91.5% Micro

6 SMEs in Jordan Employment Value-Added 60% 0.4% 30% 70% 99.6% 40%

7 SMEs in Jordan It is not acceptable to push the economy from the top SMEs

8 SMEs in Jordan SMEs

9 The Role of Industrial Sector in the Economy

10 Main Industrial Indicator
Total capital: more than 5 billion Total Firms: 18,000 firm Employees: 240,000 worker Exports: More than 90% from national exports

11 Socio-economic role of industrial sector
Around 70% of FDI went to the industrial sector More than one billion JDs as salaries and pensions Industrial sector pays more than 1.1 billion dinar as tax on production, on average 8 cent per one production dinar. Industrial sector contributed in national reserve by more than 7 billion dollar each year, result from export and investment. More than 25% as a GDP contribution

12 SME’s in industrial sector

13 Why SMEs considered as growth accelerator
Labour Intensive Low Initial Investment Requirements Local Markets Oriented Ability to play a major role in backward and forward linkages.

14 SME’s role in job creation

15 Unemployment in Jordan
Unemployment Considered as the major challenge in Jordan. Unemployment rate retched about 11.7% in the first three quarters of 2014. The percentage of population in the working age in Jordan is about (60%) for the total population. Most of the unemployed people are youth.

16 Unemployment causes in Jordan
The normal increase of population growth. (80 thousands jobs needed yearly to keep unemployment constant) Inefficient economic development plans Skilled and unskilled Foreign labour force Regional situation (refugees) Insufficient number of jobs created by the economy due to lack of real Public-Private Partnership

17 Unemployment rate in Jordan

18 The Role of Jordanian Industrial Sector in Job Creation

19 The industrial sector employs more than 18% of the total labour force in Jordan
Average workers in industrial firm is 13 worker, while the average in other sectors are around 3 worker/firm. This means that the industrial sector is able to create more jobs than any other sector. Industrial sector created more than 11 thousands jobs in 2013. 75% of its workers in Industrial sector are covered by social security.

20 Due to the fact, more than 98% industrial firms are SMEs, and the role of Jordan chamber of industry as the main body of Jordan industrial sector, is implementing several programs to create more jobs:

21 JCI Initiative was to Establish the SMEs Technical Support Unit
To Help the huge number of SMEs in the Industrial Sector To help Industrial SMEs to avoid the major challenges that they may face. To enhance and to build up the capacity of these firms

22 SMEs Technical Services
Advisory and consultation Services Access to Finance Networking and Data base

23 Strategic Goals of SME UNIT
Increase the sufficient level of SMEs Publishing the concept of self working and entrepreneurship Enhance the business environment for SMEs Supporting the financial programs for SMEs Building positive environment for workers in SME Sustainable financial services Conduct the required research and analysis

24 Role of SME Technical Support Unit
Advisory services for establishing SMEs. Business plans and feasibility studies. Capacity building for entrepreneurs. Cooperate and co-ordinate with all institutions for SMEs.

25 Role of SME Technical Support Unit
Supporting financial, production and innovation programs for SMEs. Participate in building the national database for SMEs. Building industrial clusters to enhance the level of competitiveness. Cooperate with the International donors and institutions in the field of SMEs.


27 Training and employability unit
Project Goals: Activate the role of Jordan chamber of industry to enhance training and job creation fore young job seekers in Jordan Increase the percentage of Jordanian workers in the industrial sector

28 Training and employability unit
Targeted sector: Plastic and Rubber Industries Packing, Packaging, Paper, Cartoon and Stationeries Industries Food, Supplies, Agricultural and Livestock Industries Leather and Garments Industries Furniture and Wooden Industries Geographic areas covered by the project: East Amman Zarqa Irbid

29 Partnership between academia and industrial sector
Implementing awareness training program for professors and students in universities about industrial sector and its products. Implementing joint projects according to industrial firms needs. Lunching Internship programs.

30 Thank you

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